How to Invest $100k in Canada

If you have $100,000 to invest, then congrats — you’re in a much-coveted position to generate some serious wealth. Assuming you’ve paid off high-interest debt, your best bet is to invest that $100,000 in a healthy mix of assets (like stocks, bonds, and ETFs) to get the best return on your money at the lowest risk.

Of course, with a higher starting investment, the stakes are also high. Below, we’ll break down the best ways to invest $100,000 in Canada, as well as some guiding principles to help you along the way.  

Define your investment goals and risk tolerance

Before you invest $100,000 in Canada, you need to clearly define why you’re investing and how much risk you’re willing to take. The way you allocate your money should directly align with your financial goals, investment horizon, and personal comfort with market volatility. A well-thought-out plan ensures that you’re not just chasing returns but building a portfolio designed to meet your specific objectives.

Start by asking yourself:

• What is the purpose of this investment? Are you saving for retirement, building a down payment for a home, generating passive income, or growing generational wealth?
• When will you need the money? The time horizon—short, medium, or long term—will determine whether you should focus on growth, income, or capital preservation.
• How much volatility can you tolerate? If a 20% market drop would cause you to panic and sell, you may need a more conservative allocation.

Your risk tolerance is not just emotional—it’s also financial. For example, someone with stable income and minimal debt may afford to take on more risk compared to someone nearing retirement or depending on investment income for living expenses.

Short-term, medium-term, and long-term goals

• Short-term (1–3 years): If you’ll need the money soon, preserving capital should be the priority. High-interest savings accounts (HISAs), money market funds, or short-term GICs are ideal.
• Medium-term (3–7 years): A balanced mix of equities and fixed income can help you achieve moderate growth while limiting downside risk.
• Long-term (7+ years): For retirement or wealth accumulation, stocks and equity ETFs generally deliver the best returns over time, but they require patience through market fluctuations.

Matching risk tolerance with asset allocation

Once you’ve defined your goals, you can select an appropriate asset allocation:

• Conservative: 20–40% equities, 60–80% bonds/cash for low volatility.
• Balanced: 50–60% equities, 30–40% bonds, 10% cash for moderate risk.
• Aggressive: 70–90% equities, 10–30% bonds for maximum long-term growth.

Being honest about your goals and risk tolerance upfront will keep you from making emotional decisions when markets are volatile. It also helps determine whether you should take a do-it-yourself approach, use a robo-advisor, or work with a financial planner for a more structured plan.

How to invest $100,000

Here are five places to consider investing $100,000:

1. Stocks    

For most investors, the stock market will be the best first stop on the road to investing $100,000.

Stocks are a good first pick because they allow you to invest in numerous sectors of the economy, even when you don’t have the capital to start a business or otherwise plant your flag in it. Moreover, stocks allow you to plant innumerable little flags in different market sectors, since you can buy stocks with as little as $10.

Buying stocks from different market sectors – such as tech, energy, and bank stocks – helps you balance losses from weak companies with earnings from strong ones (called diversification). Ideally, your strong stocks outperform your weakest ones, resulting in capital gains. At the very least, your stocks can balance out during a weak economy, protecting your $100,000 investment from dropping deep into the red. 

As far as what kinds of stocks to invest in, you have plenty of options. If you’re aggressive and want no ceilings on your $100k, then you can look at growth stocks, especially small- and micro-cap companies. These stocks have the greatest potential for explosive growth – though the risks are high, too. Many tech stocks fit into this type of investment style. 

Conservative investors (or aggressive ones who want some stability) can look at blue-chip stocks – big companies with enough revenue and cash to anchor themselves in weak economies. Large cap (with a market cap of more than $10 billion) and safe value stocks (undervalued based on fundamental analysis such as a low price-to-earnings ratio) might also be good investment styles, if stability is more important than explosive growth.

2. Dividend stocks

Dividend stocks are companies that pay a portion of their earnings to investors. This payment comes in the form of cash or more shares of that company’s stock, and it can be an excellent way to generate passive income.

Dividend stocks can be tricky to pick. Ideally, you want a company that pays out a hefty dividend, but also one that increases in value over time. It would make no sense, for instance, to invest a large portion of your $100,000 in a stock that pays a fat dividend if the stock itself loses value and shrinks your initial investment.

For the safest dividend stocks, you might want to look at Dividend Aristocrats. In Canada, these are stocks that are listed on the TSX and have increased their dividend for five consecutive years. Examples include Fortis (TSX:FTS), Enbridge (TSX:ENB), and Canadian Utilities (TSX:CU).

3. ETFs and mutual funds 

ETFs and mutual funds are great if you don’t want to choose individual stocks by yourself.

Buying a share in an ETF or mutual fund means pooling your money with other investors and handing it to a fund manager. This manager then builds a portfolio of investments, usually to track an index or try to beat its performance. For example, some ETFs and mutual funds track the TSX, while others track an index of tech companies.

ETFs trade intraday on exchanges like stocks. They typically have lower management expense ratios (MERs), and many are passively managed. Mutual funds can be traded at the end of a market day. Their MERs are usually higher than ETFs, often because the fund manager is more active with their trading to try to beat a market. 

If you’re looking for a single investment in which to put your $100,000, then an ETF or mutual fund could be an option. A large index fund, such as the BMO S&P/TSX Capped Composite Index ETF – which tracks the largest Canadian companies on the TSX – could give you steady growth over a long period of time.

4. Bonds

Bonds are low-risk investments that can provide fixed income until the bond expires. They have better yields than most bank products (like savings accounts and GICs), and the bond payouts can give you a steady stream of income.

Bonds are essentially loans to governments (federal, provincial, and municipal) and corporations. As a bondholder, you’re entitled to collect the amount you lend along with interest. Bonds have a coupon rate (the interest rate it pays out), a maturity date (the future day when your principal is returned), and a face value (the amount you receive at maturity).

In general, the higher the coupon rate on the bond, the riskier it is. Companies with lower financial ratings and higher chances of insolvency will issue bonds at a higher rate to attract investors.

Mixing bonds and stocks in a portfolio could give you the best of long-term growth and predictable returns. You can also invest in bond ETFs, which bring numerous bonds into one investment. 

5. Real estate investment trusts (REITs)  

Much like dividend stocks and bonds, REITs can be an excellent way to earn passive income on a portion of your $100,000.

REITs are companies that pool investor money together to buy, develop, and manage real estate properties. Many of these companies traded on stock exchanges like the TSX or through crowdfunding platforms. Unlike stocks, the REIT company itself often doesn’t appreciate. But they do pay hefty dividends to shareholders, sometimes more than dividend stocks. 

6. Use a professional or DIY approach

• Online brokerage accounts: For DIY investors, platforms like Wealthsimple Trade, Questrade, or RBC Direct Investing offer low-fee trading for stocks and ETFs.
• Robo-advisors: If you prefer a hands-off approach, robo-advisors like Wealthsimple Invest or Questwealth Portfolios automatically build and rebalance a diversified ETF portfolio for a small management fee.
• Financial advisors or portfolio managers: For tailored advice and tax-efficient strategies, a fee-only financial planner or discretionary portfolio manager may be worth considering—especially for six-figure investments.

Example of a $100k investment portfolio

Here’s a sample allocation for a moderately aggressive investor:

Tips for investing $100,000 in Canada

• Aim for a well-diversified portfolio. Spread your $100,000 across multiple investments and assets. This can bring greater stability and reduce volatility.

• Be sensitive to your time horizon. Investing $100,000 for a retirement that’s 25 years away will look very different than investing $100,000 as a retiree. Each has different goals and may require an aggressive or conservative strategy.

• Reduce investing fees where you can. Use an online broker that charges low trading commissions. Trade in high volume when you can to avoid paying trading commissions more than once.

• Use tax-advantage accounts. Like a TFSA or RRSP. These can help you cut down on capital gains taxes and minimize your tax bill.